Court File and Parties

COURT FILE NO.: 07-CV-333260 DATE: 20160530 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: SANJEE RISHI AND SHALINI BHARDWAJ, Plaintiff AND: RUBY Kakaoutis, also known as RUBY KAKOUTIS, SYLViA KAKOUTiS also known as VASILiki (SYlVIA) KAROUMBALIS, LOUIS KAKOuTIS, NiKOLAS tRAIKOS, ANGElA TRAiKOS, JOHN YOUNG, DOREEN K. YOUNG and CENTURY 21 HArveST REALTY LTD., Defendants

BEFORE: Stinson J.

COUNSEL: Wayne S. Laski, for the plaintiffs/moving parties Louis Kakoutis, acting in person Yeon-Tae Kim, for the Public Guardian and Trustee No one appearing for other parties

HEARD at Toronto: April 27, 2016

Endorsement

[1] This lawsuit concerns a residential real estate transaction that did not close. The plaintiffs were the purchasers.

[2] The purchasers claim they had a valid agreement of purchase and sale with the first two named defendants, Ruby Kakoutis, and her daughter Sylvia Kakoutis to buy from them their house on Muirhead Road in Toronto. (The surname of the defendants is spelled as both “Kakoutis” and “Kakaoutis” in the motion materials and the defendant Sylvia Kakoutis is variously referred to as “Sylvia Kakoutis” and “Sylvia Karoumbalis”; for simplicity, I will use the Kakoutis spelling and surname throughout this decision).

[3] The purchasers paid a deposit of $10,000 to the real estate agency representing the vendors. The transaction was scheduled to close in July 2006, but it did not. Among other issues, the parties dispute the reasons why the transaction did not close and who is to blame.

[4] In this lawsuit, commenced in May 2007, the plaintiffs seek the return of their deposit. They also claim damages arising from the fact that to buy a replacement or substitute house, they had to pay a higher sum and also incurred other expenses.

[5] In addition to the vendors named in the agreement of purchase and sale, the plaintiffs have included a number of other defendants in the lawsuit, as follows:

(a) Louis Kakoutis – he is the son of Ruby Kakoutis and the brother of Sylvia Kakoutis. It is alleged that he wrongly advised the plaintiffs’ real estate agent that his mother (Ruby Kakoutis), had a valid power of attorney to sign the agreement of purchase and sale on behalf of his sister (Sylvia Kakoutis), a representation from which the vendors later resiled. It is also alleged that Mr. Kakoutis harassed the plaintiffs and their family once issues arose concerning the closing of the transaction, as a result of which they have suffered emotional and psychological trauma.

(b) The defendants Nikolas Traikos and Angela Traikos – they are allegedly the registered owners of the house on Muirhead Road. They appear to have been the previous owners of the property. Presumably, they were included to ensure that the plaintiffs’ rights were fully protected as regards the property.

(c) John Young, Doreen Young and Century 21 Harvest Realty Limited (the “Realty Defendants”) – these are the real estate agents and broker who acted for the sellers in the transaction. It is alleged that they wrongly represented that they had a power of attorney signed by Sylvia Kakoutis. Century 21 continues to hold the $10,000 deposit.

[6] Despite the fact the litigation was commenced in 2007, it has advanced very little. Pleadings have been exchanged. No lawyer acts for Ruby Kakoutis, Sylvia Kakoutis or Mr. Kakoutis. Mr. Kakoutis has been acting on his own behalf and has been accepting service of documents on behalf of his mother and sister. He is not a lawyer.

[7] In the statement of defence delivered by him on his own behalf and on behalf of his mother and sister, Mr. Kakoutis has included a counterclaim for damages. His pleading includes the following paragraph:

26. Louis Kakoutis suffers from posttraumatic stress disorder as a result of a motor vehicle accident which happened on June 30, 2003. As a result of the false and scurrilous allegations contained in the statement of claim against himself and his mother Ruby Kakoutis, Louis Kakoutis has suffered emotional and psychological trauma, including but not limited to sleep disturbances, loss of self-esteem, feelings of powerlessness, anxiety and insomnia.

[8] The motor vehicle accident to which Mr. Kakoutis refers in his pleading was itself the subject of litigation at the instance of Mr. Kakoutis. He sued the driver of the other vehicle, Rajbir Singh. He acted for himself. During the course of that proceeding, McIsaac J. of the Superior Court directed a hearing to determine whether Mr. Kakoutis suffered from a legal disability under rule 7.01 of the Rules of Civil Procedure and, if so, whether the Public Guardian and Trustee (“PGT”) should be appointed to continue that action on his behalf. In his April 2008 ruling on that point, McIsaac J. concluded that Mr. Kakoutis required a litigation guardian: Kakoutis v. Singh, [2008] O.J. No. 4082. McIsaac J. based his conclusion on Mr. Kakoutis’ conduct at the outset of the trial and as well the evidence of Dr. Margulies, a psychiatrist who had conducted an assessment of Mr. Kakoutis pursuant to s. 105 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[9] The significance of the foregoing is that the progress of this real estate litigation has been impeded by the issue of whether Mr. Kakoutis is still under a legal disability such that he requires a litigation guardian in this proceeding. Due to concerns on the part of plaintiffs’ counsel, he brought a motion before B. O’Marra J. in November 2011, seeking the appointment of a litigation guardian. Mr. Kakoutis opposed such an appointment, as he had before McIsaac J. in the motor vehicle litigation. In his decision on the motion (Rishi v. Kakaoutis, 2011 ONSC 7184) B. O'Marra J. commented that, unlike McIsaac J., he did not have current medical evidence upon which to base a finding of disability. He did note that the decision of McIsaac J. was relevant and informative on whether he should order a mental assessment. He issued an order that Mr. Kakoutis attend at a time and place to be specified for a mental examination to be conducted by a medical practitioner to be named in a further court order.

[10] For reasons that are not entirely clear, or which are disputed, the mental examination ordered by B. O'Marra J. did not take place. There is some issue about whether a willing examiner could be found or whether a satisfactory arrangement could be put in place for the payment of the examiner's fees or whether Mr. Kakoutis was willing to attend. For purposes of the present motion, I do not consider it necessary to resolve that issue. It is sufficient to say that in the approximately eight years since the mental examination which gave rise to the order of McIsaac J., Mr. Kakoutis has not participated in a further mental examination.

[11] Subsequent to the order of B. O'Marra J. and the difficulties encountered concerning the examination ordered then, counsel for the plaintiffs encountered his own set of health difficulties. As a result, the litigation stalled. Plaintiffs’ counsel has now regained his health and again seeks to move the matter forward.

[12] As a first step to doing so, the plaintiffs have brought this motion. As framed, the motion seeks an order appointing the PGT to continue the proceedings as litigation guardian of Ruby Kakoutis, Louis Kakoutis and Sylvia Kakoutis. The motion further seeks an order that the deposit of $10,000 and accrued interest be returned by Century 21 to the plaintiffs. Finally, the motion seeks orders that various postings on the Internet by Louis Kakoutis and Sylvia Kakoutis relating to this action be removed and that those defendants be prevented from posting further information relating to this action on any website.

[13] Mr. Kakoutis informed the court that he was willing to consent to an order that the deposit be returned to the plaintiffs. He stated that both he and his mother and sister had long since agreed to that course of action. Indeed, some years ago a court order was made that the realtor release the deposit, but the order failed to specify the party to whom it should be released. Mr. Kakoutis assured the court that he had power of attorney on behalf of his mother and he identified an email confirmation from his sister indicating her willingness to release the deposit to the plaintiffs.

[14] Despite these assurances from Mr. Kakoutis, plaintiffs’ counsel requested that, as an initial step, the court should determine whether Mr. Kakoutis needs a litigation guardian. His rationale for doing so was that if indeed Mr. Kakoutis is currently under a legal disability, any consent that he might give today could be subject to attack at a later date. To preserve the integrity of the process, counsel argued, the issue of legal disability should be determined as a first step.

[15] I agree with plaintiffs’ counsel that before any other steps are taken in the litigation, the potential need for a litigation guardian for Mr. Kakoutis must be addressed. In his notice of motion, plaintiffs’ counsel seeks to have litigation guardian appointed for all of Mr. Kakoutis, his mother and his sister. Although Mr. Kakoutis purports to speak on their behalf in relation to this litigation and has filed a defence and counterclaim on their behalf, he is not a lawyer and therefore cannot represent them: Tunney v. Toronto (City) Police Service, 2015 ONSC 6761. Thus, in effect, those two defendants were not represented on this motion. There is also no medical evidence that would support an order for the appointment of a litigation guardian for either Ruby Kakoutis or Sylvia Kakoutis. Hence no such order can be made as against them based on the current record.

[16] With respect to the possible appointment of a litigation guardian for Mr. Kakoutis, there is no current medical information that would support such an order. As I have mentioned, the examination that gave rise to the appointment of the PGT as litigation guardian for Mr. Kakoutis in the Singh litigation took place approximately eight years ago. Although Dr. Margulies, the doctor who conducted that examination, opined that his condition was unlikely to improve absent therapy, I am not prepared to rely on such a dated examination for purposes of making such a significant order.

[17] Mr. Kakoutis quite properly observed that there is a presumption of competence. The mere fact that another judge found he was under a legal disability some years ago does not mean that his mental condition remains unchanged.

[18] Mr. Kakoutis indicated that he was not willing to participate in a mental examination or competency assessment. The dispute on the motion before me, therefore, became whether the court should order Mr. Kakoutis to participate in a mental examination at this juncture.

[19] In 626381 Ontario Ltd. v. Kagan, Shastri, 2013 ONSC 4114, I considered the jurisdiction and circumstances under which a court could make an order for a mental assessment of a party in connection with a dispute whether the party required a litigation guardian. I do not propose to repeat that analysis here; instead, I adopt it by reference into these reasons. It supports the following conclusions:

(a) The court has jurisdiction under s. 105 of the Courts of Justice Act to order a party to attend a mental examination;

(b) The jurisdiction of the court to compel a party to undergo a mental examination for purposes of a rule 7 motion, where the issue of the need for a litigation guardian is raised by the adverse party, requires that s.105(3) of the Courts of Justice Act must be satisfied.

[20] Subsections 105(2) and (3) of the Courts of Justice Act provides as follows:

105(2) Where the physical or mental condition of a party to a proceeding is in question, the court, on motion, may order the party to undergo a physical or mental examination by one or more health practitioners.

105(3) Where the question of a party’s physical or mental condition is first raised by another party, an order under this section shall not be made unless the allegation is relevant to a material issue in the proceeding and there is good reason to believe that there is substance to the allegation.

[21] As I observed in 626381 Ontario Ltd., supra, at paragraph 40, where there is a motion to appoint a litigation guardian “a s. 105 order to obtain the required evidence should be the rare exception and not the rule". Such an order is discretionary and should not be granted lightly or without good reason, giving due consideration to the autonomy of the individual.

[22] In the present case it is true that the suggestion that Mr. Kakoutis requires a litigation guardian is one that has been raised by the opposite party. That said, in the counterclaim filed by him, Mr. Kakoutis himself raised the issue of his mental health in paragraph 26 of that pleading, quoted above. Thus the present situation is not caught by s. 105(3). Mr. Kakoutis himself put his mental state in issue by alleging he has suffered from PTSD and psychological trauma due to the plaintiffs’ conduct. By making those allegations, he brought his case within s. 105(2).

[23] I note that there are some grounds to believe that there may be substance to the alleged disability. These include the observations and comments of McIsaac J. in the Singh decision, the observations and comments of B. O'Marra J. in his decision and the medical opinion of Dr. Margulies.

[24] As well, one cannot overlook the basic purpose of the appointment of a litigation guardian: “to protect the integrity of the judicial process for all participants in the litigation including the court.” See the discussion at paragraphs 16 and 17 in 626381 Ontario Ltd.

[25] I should add that, in this decision, I am making no predetermination on the subject whether a litigation guardian for Mr. Kakoutis is required. Nor am I making any decision with respect to the identity of a potential litigation guardian. Mr. Kakoutis has made it plain that he would strenuously resist the appointment of the PGT and instead would propose his wife be appointed. Such an approach would be consistent with rule 7.04 of the Rules of Civil Procedure.

[26] In view of the foregoing, pursuant to the authority of s. 105(2) of the Courts of Justice Act, I order that Mr. Kakoutis to undergo a mental examination by a health practitioner. With respect to the nature of the examination and the report requested by the court, I would expect it would address the topics that are listed in paragraph 68 of my decision in 626381 Ontario Ltd. at a minimum.

[27] In relation to the identity of the examiner, by letter to B. O'Marra J. from the PGT dated January 13, 2012, a list of potential assessors was provided. I direct that, with the exception of Dr. Sands, Mr. Kakoutis select one of those potential assessors and attend for an examination no later than July 29, 2016, or such later date as plaintiffs’ counsel may agree, in writing. The expense of the examination will be borne by the plaintiffs, pursuant to the undertaking given to the court by plaintiffs’ counsel on the argument before me.

[28] Once the report of the assessor is available, the parties may arrange a case conference with me for purposes of determining the next steps in the proceeding. A case conference with me may also be arranged should the parties encounter any difficulty in implementing the order arising from these reasons.

[29] In relation to the request for payment of the deposit monies to the plaintiffs, this can be accomplished by motion on consent of the affected parties: the plaintiffs, Ruby Kakoutis, Sylvia Kakoutis, and the Realty Defendants. The consent may be signed by the Counsel for the plaintiffs and for the Realty Defendants. The consent will need to be executed personally by the defendants Ruby Kakoutis and Sylvia Kakoutis, and an affidavit of execution by a witness will be required. If the consent is to be signed by someone holding a power of attorney for either of those parties, a copy of the power of attorney is required. In the event the holder of the power of attorney is Mr. Kakoutis, the motion for payment of the deposit will have to wait until the litigation guardian issue is resolved.

[30] In relation to the Internet postings, in my view I do not have jurisdiction in this proceeding to make any such orders. Should the plaintiffs or their counsel or anyone else assert that the postings are defamatory or otherwise violate the plaintiffs’ or other parties’ rights, they will need to take appropriate steps in a proceeding in which that relief is expressly sought in the statement of claim. This lawsuit concerns a dispute over an aborted real estate transaction, not defamation. I therefore decline to grant relief in relation to Internet postings.

Stinson J. Date: May 30, 2016